Owner Financing/ Seller Carry back

[Jeff Bowman]

I have an issue that I would like to ask other forum members about:

basic situation: my father has health issues and has been placed into senior citizens home/assisted living. We're needing to liquidate current real estate assets in order to pay off debt and rid ourselves of this townhome (HOA covenants prohibit from being rented to a tenant).

There is a secured line of credit against a second residence my father took out several years ago that is fully invested in multifamily notes. Security on the notes is good but they cannot be pledged or sold for other collateral. The townhome is owned free and clear but purchased in 2006 at the top of the market. I have been tasked with getting this townhome on the market and selling it for a 'good price". Agent thinks target number is doable but on the high side.

My question is this: the only thing that really needs to get paid down is the line of credit which amortizes in November at LIBOR +1. It's not a crisis situation since their budget can handle the amortization but it would be better to pay down the LOC and have some extra liquidity to rollover into SFR eventually.

Last time the house was put on market it did not sell. Since it is owned free and clear, I'm trying to think of ways to do owner financing and encourage buyers to purchase on a seller carry back deal. In an ideal world, we would receive the amount needed to pay down the LOC and then finance the remainder of the purchase price at an attractive interest rate for all parties and have a note for the remainder.

As I said before, the problem is that any purchaser of the townhome will have to use it as a residence/owner occupancy since there is no subleasing in the townhome community. I've experience in buying/selling rentals but don't have any experience with selling non-investment property to an owner occupant. I'm going to use a realtor to show the house but would like to be involved in a kitchen table negotiation to try and see if I can get a buyer interested with some sort of owner financing if the purchase price is too high and there are no buyers.

Any thoughts on how to structure this deal or am I making it too complicated?